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I played around with the numbers on a 50 year vs a 30 year mortgage. Everything else being equal (taxes, home value, and escrow), I assumed that a longer term would result in a larger interest rate. So, if a 30 year has a rate of 6% and a 50 year has a rate of 7%, your monthly payment is the same. There is no upside and all downside. The bank makes twice the interest over the 50 year term.
It basically is an interest only loan for the first several years. The principal portion of the payment on a 50 year mortgage on a $500k home is less than $100/month on a $3k payment.
Unfortunately, not all of us were financially literate early. I was 38 when I finally educated myself and started taking steps. I went from $112,000 in debt with zero savings or retirement to now, 2 years later, fully debt-free and over $800,000 net worth. I know that doesn't SOUND like a lot, but l'm incredibly proud of it. Now I'm fast-tracking my wealth building (investing $120,000 annually) and don't owe a dime to anyone. It's a good feeling!❤️
I think Bo is talking about a prioritization matrix
50 year mortgage? Insane product for people who don't do math!
Yea bo, youre right. There needs to be more SUPPLY of affordable/snaller houses. Supply & demand. Econ 101.
A home is a Consumable Asset, meaning that you use the asset as it appreciates. Putting longer leverage on such Assets basically saves you little in the long run. Moral of the Story is if you cant afford it with a 30 year loan do not think about buying it.
As a financial mutant I just bought a home in 2019 lol just kidding but idk how I would afford the same amount of house now
Love your content. Just one thing, every time someone misrepresents the great depression as grossly i get a bit angry. The recovery took only about 7 years in real terms not 25 (you have to account for the deflation on one hand, plus the available data ignores the way higher dividend yield back then because the used index data used is not total return but only nominal, so that leaves out a huge chunk of the returns). Would be a nice piece to debunk that at some point and I'd love to see you guys do that 🫶
No Tumbler Day today 😮😢?
I am NOT excited for this 😮😢
Just happy to be part of the viewership that caught the sneeze on air! Hahaha And my wife tells me that my financial videos are boring.